2001 (1) TMI 447 - AT - Central Excise

Summary

Issues: Classification dispute involving racks and cabinets under Central Excise Tariff headings 85.38 and 94.03.

In this judgment, the Appellate Tribunal CEGAT, Mumbai, dealt with a classification dispute regarding racks and cabinets under the Central Excise Tariff. The jurisdictional Assistant Collector initially approved the classification claimed by the assessees under chapter Heading 85.38. However, the jurisdictional Collector sought to review this classification, leading to appeals filed by the department before the Collector (Appeals). The Collector (Appeals) set aside the Assistant Collector's orders and classified the products under chapter Heading 94.03. This decision prompted the assessees to appeal before the Appellate Tribunal.

The products in question, including racks, cabinets, and card frames, were claimed by the appellants to be specially designed for housing electronic systems in accordance with Indian Standard Specifications. They argued that these items were solely used as parts of apparatus classifiable under specific chapter headings and should be classified under chapter Heading 85.38. However, the lower appellate authority rejected this claim, considering the products more akin to furniture designed for placement on the floor or ground. The Collector (Appeals) classified the products under chapter 94, citing the nature of the goods and the purpose for which they were designed.

During the proceedings, the appellants' advocate presented the manufacturers' catalogue to demonstrate that the metal enclosures were specifically designed for electronic apparatus. The advocate argued against classifying the products under chapter 94, emphasizing that they did not fit the definition of furniture. Reference was made to a decision by the Tribunal's Bench in a similar case, where the classification favored the Revenue due to lack of evidence showing the products as parts of goods falling under specific chapter headings. The advocate requested time to provide additional evidence, which was opposed by the SDR.

The issue before the Tribunal mirrored a decision by the Delhi Bench, where the classification was denied due to the appellants' failure to prove that the products were parts of apparatus falling under specific chapter headings. The appellants did not manufacture the relevant apparatus during the period in question, only producing racks and cabinets for other manufacturers. As per the Tribunal, to classify under chapter Heading 85.38, it was crucial to demonstrate that the racks and cabinets were designed for apparatus falling under specific headings, which the appellants failed to establish. Consequently, the Tribunal upheld the decision of the Delhi Bench and rejected the appeals, finding no merit in the appellants' arguments.